Mobile Telephony in Africa: Celtel International's Growth Strategies



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Code : COM0083

Year :
2005

Industry : Telecommunications

Region : Africa

Teaching Note:Not Available

Structured Assignment :Not Available

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Celtel International - The Dutch Mobile Operator in Africa Celtel forayed into the emerging mobile communications market of Africa as Mobile Systems International Cellular Investments Holding B.V. Its parent company Mobile Systems International (MSI) was co-founded in 1989 at London by Dr.Mohamed Ibrahim, an engineer of Sudanese origin. MSI provided consultancy services across the globe for installing and operating wireless systems. In 1998, a division of MSI, MSI Cellular Investments, split from its parent company and established its operations in the Netherlands. Terry Rhodes, Chief Strategy Officer at Celtel International, said, "We are run out of Europe because that's where the bulk of the money, technology and skilled people in our business are. About a third of our money was raised in the U.S., 1% in Africa and the rest in Europe"...

Growth Strategies in Africa Celtel formed partnerships with local operators to enter the African markets and to increase its customer base. In Zambia, it formed an alliance with Zamcell Ltd., Mitsui, and International Finance Corporation (IFC). Celtel also ventured independently into Uganda after acquiring a license from the Ugandan government to establish its network. The main challenge faced by the company was to develop networks in regions where even the infrastructure for fixed line telephony had been neglected following decades of under investment in the telecommunications sector. Celtel mainly targeted rural customers,who had limited access to telecommunications compared to their urban counterparts...

The Challenges Ahead Marten Pieters, CEOof Celtel International, said, "As ofDecember 2004, mobile penetration was less than 5% in 10 of the 13 countries in which Celtel operates. Therefore, the Group believes that there is significant opportunity for customer and revenue growth in sub-Saharan Africa." It is projected that by 2009, the mobile penetration in Africa would be 15% or 145 million subscribers. Celtel intends to expand its operations into West Africa, which is underdeveloped with regard to mobile communications, due to lack of investment...

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